Organisation for Economic Co-operation and Development (OECD)

• History of the OECD
• New Zealand and the OECD
• What does the OECD do?

What is the Organisation for Economic Co-operation and Development (OECD)?

Based in Paris, France, the Organisation for Economic Cooperation and Development (the OECD) is an inter-governmental organisation that provides the setting for democratic and market oriented countries to study and develop economic and social policies with the ultimate aim of maximising economic growth. New Zealand joined the OECD in 1973.

The principal aims of the OECD are to:

• help member countries promote sustainable economic growth, employment and rising standards of living while maintaining financial stability, thereby contributing to the development of the world economy
• contribute to sound economic expansion in member countries and in non-member countries in the process of economic development
• contribute to the expansion of world trade on a multilateral non-discriminatory basis.

Through membership of the OECD 30 countries discuss and compare policy approaches to economic issues as wide-ranging as population aging, pollution, sustainable development, health, governance, development assistance, trade and agriculture. The OECD provides bench-marking advice to members on best practice in social and economic policies, assists members to coordinate policy, and sometimes helps member countries to develop accords and agreements which must then be adopted by consensus. Increasingly, a priority for the OECD is to relate its work to the needs of developing countries in order to identify ways in which to enhance their prospects for achieving economic growth.

The OECD works at the cutting edge of all the key economic and social issues on the international economic agenda. The main areas the OECD works in are:

• identifying best practice for a broad range of policies on issues such as economic development, trade, population aging, the environment, sustainable development, tourism, development assistance, agriculture and governance
• producing analytical and research material, including comparative statistical, economic and social data, to enable its member countries to benchmark their performance against best practice
• contributing to the economic development of developing countries including through identifying best practice in development assistance
• helping its member governments to formulate responses to policy challenges through rigorous and objective analysis
• building international consensus on rules, codes and guidelines for international behaviour in many areas (eg on export credits, corporate governance, competition, poverty reduction and taxation)
• contributing to the expansion of world trade on a multilateral non-discriminatory basis.

The history of the OECD

The OECD grew out of the Organisation for European Economic Cooperation (OEEC) which was created to help rebuild European economies after World War II. In 1961, after reconstruction was largely accomplished, the United States, Canada and Europe transformed the OEEC into the OECD to serve as a forum to help build strong economies across the membership. Given this broader mandate its membership has expanded to include countries such as New Zealand and Australia as well as Japan, Korea and Mexico, and the new market economies of Eastern Europe. New Zealand joined the OECD in 1973. The OECD has extensive cooperation programmes, including those with China and Russia.

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New Zealand and the OECD

The OECD provides a valuable forum through which New Zealand can make its voice heard on key economic and social issues. Members share a common belief that trade and investment are engines of global economic growth and prosperity, and are fundamental to the reduction of poverty. Through the OECD, New Zealand can learn from others' experiences - both their successes and their mistakes - across the full range of economic and social policy challenges facing governments. The OECD is also a valuable source of intellectual capital and analytical work on which New Zealand can draw to supplement and confirm our own policy development process.

OECD membership enables New Zealand public servants to build extensive cooperative networks with their counterparts in other OECD member countries - networks on which they can draw to improve the quality of their work in the interests of the New Zealand public. Many government departments have regular direct contact with the OECD and there is a New Zealand delegation to the OECD which is part of the New Zealand Embassy in Paris.

As an organisation which is more than regional, but less than global, the OECD usefully fills a niche in the architecture of international economic organisations. New Zealand has a particular interest in the OECD Economic Outlook - published twice a year - which provides an assessment of economic trends, prospects and policies in member countries. The organisation's regular country reviews, which involve peer review by other OECD members, are a unique source of insight into our comparative performance across a broad range of government policy areas - they tell us how others see us. A good example is the periodic reviews of New Zealand's economy and overseas development assistance.

In 2003, former Prime Minister Helen Clark chaired the OECD Ministerial Council Meeting (MCM) - the annual meeting of finance/trade ministers. Key themes included: policies to maintain confidence and enhance economic growth; promoting growth and investment in developing countries; WTO trade negotiations; and reform of the OECD.

2007 Ministerial Council Meeting and Forum

Hon Phil Goff, then Trade Minister, attended the 2007 Ministerial Council Meeting and Forum (an international public conference held in parallel with the Ministerial Council Meeting) . The Minister addressed Forum participants during the international trade sessions. He highlighted the importance of a successful completion of the Doha Development Round and underlined the important role of the OECD's analytical capacity to support the negotiations.

What does the OECD do?

Guidelines for Multinational Enterprises

An example of one aspect of work that is driven by the OECD and its membership are its Guidelines for Multinational Enterprises. These guidelines set out voluntary principles. These are designed to help multinational firms operate in harmony with the policies and societal expectations of their national governments and align their activities with international best practice. The guidelines' coverage is broad, touching on issues such as information disclosure, employment, industrial relations, the environment, combating disclosure, consumer interests, science and technology, competition and taxation. The guidelines were developed by 39 governments (including New Zealand) and are increasingly being used to guide the development of ethical codes in business.

The Ministry of Economic Development has been appointed as New Zealand's National Contact Point regarding these guidelines. As the National Contact Point the Ministry has three broad objectives:

• promote the guidelines
• help to resolve any issues arising from the guidelines
• report on its activities to the OECD.

For further information about the Guidelines, please contact David Lilly, Competition, Trade and Investment Branch, Ministry of Economic Development, phone/fax +64 4 474 2681, email: oecd-ncp@med.govt.nz

The Financial Action Task Force

The Financial Action Task Force (FATF), of which New Zealand is a member, is an inter-governmental body which sets international standards for anti-money laundering and counter-terrorist financing. Although FATF and the OECD are separate organisations the FATF secretariat is located at the OECD. The FATF monitors the building of anti-money laundering systems in its member countries and cooperates with other international bodies involved in the fight against money laundering.

The Ministry of Justice is responsible for coordinating the development of New Zealand's anti-money laundering and counter-terrorist financing policy. top of page